The Egyptian General Petroleum Corporation (EGPC) plans to make a new payment of foreign partners’ entitlements by the end of September—up to $500m—to be financed by new tranches obtained from the World Bank loan, according to sources within the corporation.
The sources said that the EGPC is currently discussing with the government a new payment for foreign partners, during the next two months, noting that the amount will range between $200m and $500m.
Egypt’s Finance Minister Mohamed Moeit expects that Egypt to receive the fourth tranche, worth $2bn, of the $12bn loan from the International Monetary Fund (IMF) this month.
The Ministry of Petroleum was able to reduce the dues of international oil companies to reach $2.3bn two fiscal years ago, following the implementation of the economic reform programme, during the past period.
The crisis of entitlements of foreign partners was exacerbated after the January 2011 revolution, because the government did not pay for the share of foreign partners in production.
According to the sources, the Ministry of Petroleum seeks to pay all the dues of foreign partners, in order to motivate them to increase the pumping of investments, which contributes to raising the production rates and the volume of reserves of oil and gas to provide the local energy needs.
In parallel, the EGPC is preparing to receive 2m barrels of crude oil from Basra in two weeks, which represents the fourth shipment.
The sources said that the shipments of Basra crude oil are pumped to a number of domestic refineries, in order to convert them to petroleum products to meet the needs of the sectors of the state, and to reduce the trend of importing fuel from abroad.
The EGPC announced earlier this year that it is renewing its agreement with the Iraqi oil Ministry to supply Egypt with about 12m barrels of Iraqi oil for one year.